SolarEdge Technologies, Inc. (SEDG) Earnings
SolarEdge Technologies, Inc. is expected to report next earnings on November 4, 2026 (in NaN days), with a consensus EPS estimate of $0.03. SEDG has beaten EPS estimates in 8 of its last 12 reported quarters (average surprise +93.0% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Aug 5, 2026 | $-0.02 | $0.06 | +414.3% | $346M | +1.5% |
| May 6, 2026 | $-0.23 | $-0.43 | -87.0% | $311M | +1.6% |
| Feb 18, 2026 | $-0.19 | $-0.14 | +26.3% | $335M | +13.9% |
| Nov 5, 2025 | $-0.38 | $-0.31 | +18.4% | $340M | +3.0% |
| Aug 7, 2025 | $-0.82 | $-0.81 | +1.2% | $289M | -6.4% |
| Feb 19, 2025 | $-1.52 | $-3.52 | -131.6% | $171M | -16.3% |
| Feb 20, 2024 | $-1.47 | $-0.92 | +37.4% | $316M | -2.2% |
| Nov 1, 2023 | $0.68 | $-0.55 | -180.9% | $725M | -7.5% |
| Aug 1, 2023 | $2.52 | $2.62 | +4.0% | $991M | +5.6% |
| May 3, 2023 | $1.93 | $2.90 | +50.3% | $944M | +1.2% |
| Feb 13, 2023 | $1.60 | $2.86 | +78.7% | $891M | +1.2% |
| Aug 2, 2022 | $1.40 | $0.95 | -32.1% | $728M | -0.4% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2026 · August 5, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
### Core Business Transformation & Profitability - 2026 is framed as a year of transformation and acceleration centered on four strategic priorities: driving profitable growth, expanding global market share, scaling the SolarEdge Nexus platform, and capturing the AI factory power infrastructure opportunity - Q2 2026 marked a key milestone in the company's turnaround, achieving non-GAAP operating profitability for the first time since Q2 2023, driven by six consecutive quarters of non-GAAP gross margin expansion and strict expense discipline - New CFO Maoz Sigron outlined three immediate priorities: aligning investments in Nexus and AI factory solutions with clear return milestones, driving ongoing cost discipline and operational excellence across manufacturing and supply chain, and prioritizing free cash flow generation to maintain a strong balance sheet Market Share Performance - U.S. residential solar demand remained soft in Q2 due to constrained tax equity funding and policy uncertainty around IRA classification, straining installer cash flows and leading to reduced distributor inventory; the company expects this softness to continue into Q3, but is positioned to gain share when the market rebounds, supported by closed Safe Harbor transactions ahead of the July 4 deadline and alignment with the TPO business model - U.S. CNI (Commercial & Industrial) solar reached over 50% market share in rooftop installations, with SolarEdge systems installed on more than 60% of Fortune 100 company rooftops; the company is the only major CNI inverter vendor producing scaled U.S.-made products that meet domestic content and FCC covered list requirements, positioning it for further share gains - Europe revenue more than doubled year-over-year, driven by growing solar and storage demand ahead of net metering phase-outs in major markets; Q2 generated over $20 million in upsell revenue from retrofit campaigns across the company's 1 million+ installed base in the Netherlands and DACH region, with this opportunity expected to grow New Product & New Market Development - The three-phase version of the Nexus storage and PV platform saw meaningful Q2 rollout in Europe, with shipments exceeding $60 million; an independent analysis found Nexus delivers €5,000 in additional homeowner savings over 15 years compared to leading competitors, driven by higher efficiency and production; Nexus has been approved for a growing list of U.S. financing platforms, with volume rollout ongoing - The AI data center SST power solution moved from development to live customer demonstrations in Q2; demonstrations validated 99% efficiency, direct medium voltage AC to regulated DC conversion, meeting key customer requirements; the company remains on track for a full working lab system by end of 2026, pilot installations in 2027, and volume shipments in 2028, targeting the growing need for higher power efficiency and compute capacity in AI data centers Balance Sheet & Cash Management - As of June 30, 2026, cash and equivalents totaled $601.6 million; Q2 generated $3.1 million in free cash flow, with full year 2026 positive free cash flow still expected; full year 2026 capital expenditure is guided to $60-80 million, allocated to U.S. production capacity expansion, new Israeli R&D facilities, AI factory product development, and maintenance
Guidance
- Third quarter 2026 revenue is expected in the range of $310 million to $340 million, with a sequential revenue decline concentrated in Europe (~$15 million at the midpoint) driven by normal seasonality; no meaningful revenue pull-forward from Safe Harbor transactions is included in the guidance - Non-GAAP gross margin for Q3 2026 is expected between 22% and 26%, with the sequential decline primarily driven by lower fixed cost absorption from lower expected volumes, with underlying product margin improving slightly when excluding this volume effect - Non-GAAP operating expenses for Q3 2026 are expected between $86 million and $91 million, in line with Q2's $88.5 million run rate, and reflect continued cost discipline alongside planned investment in Nexus and AI factory SST development; the midpoint of guidance implies non-GAAP operating profit for Q3 - Full year 2026 capital expenditure guidance is maintained at $60 million to $80 million, and full year 2026 positive free cash flow is still expected, matching prior outlooks
Segment performance
By geographic segment (GAAP basis): - U.S. segment: $154.9 million in revenue, down 2% quarter-over-quarter, contributing 44.7% of total GAAP revenue - Europe segment: $154.4 million in revenue, up 36% quarter-over-quarter, contributing 44.6% of total GAAP revenue - International (rest of world) segment: $36.9 million in revenue, down 5% quarter-over-quarter, contributing 10.7% of total GAAP revenue Overall second quarter 2026 GAAP total revenue was $346.2 million, up 19.6% year-over-year. Non-GAAP gross margin reached 28.6% (up from 23.5% in Q1 2026 and 13.1% in Q2 2025), and non-GAAP operating income was $10.2 million, the first positive non-GAAP operating profit in nearly three years.
Risks & headwinds
- Ongoing softness in the U.S. residential solar market driven by constrained tax equity funding and policy uncertainty around IRA content classification, which has strained installer and distributor cash flows and reduced near-term demand - Component supply constraints driven by growing data center demand, particularly for memory chips, which has created moderate price pressure that the company is working to mitigate - Uncertainty around the timing and impact of potential additional restrictions on Chinese inverters in both the U.S. (FCC covered list implementation) and Europe, though the company notes it is already in full compliance with existing U.S. rules - Seasonal demand weakness in Europe that reduces Q3 volumes, with typical seasonal Q4 weakness also a historical trend
Analyst Q&A
Q: What is driving the expected sequential decline in Q3 gross margins, and what is the current state of U.S. channel inventory? Could channel destocking lead to a sequential Q4 revenue decline?
A: The expected gross margin decline is entirely driven by lower Q3 volume leading to lower fixed cost absorption; excluding this volume effect, underlying product margins are slightly improved quarter-over-quarter. Channel inventory is overall normalized across both the U.S. and Europe, with distributors only maintaining a cautious approach due to ongoing IRA policy uncertainty, with no material overhang expected to drive a large Q4 destock. Future revenue trends will depend on when policy clarity emerges and funding conditions improve for the U.S. market.
Q: Why has SolarEdge not seen significant pull-forward revenue from Safe Harbor transactions unlike peers, and how is the company positioned for the new FCC inverter restrictions?
A: Most of SolarEdge's CNI and residential customers prefer the physical work test for Safe Harbor, which aligns revenue purchases with actual installation demand and creates a healthier channel flow, rather than pulling forward inventory. Customers are comfortable with this approach given their confidence in Nexus's long-term market leadership. SolarEdge manufactures Nexus and all of its products for the U.S. market domestically, and is already in full compliance with the FCC covered list requirements, so no exemption is needed and there will be no delay to the U.S. Nexus rollout.
Q: What are the next milestones for the AI data center SST power solution, and when will the company share revenue projections for this opportunity?
A: The company recently completed successful live demonstrations of a working prototype to prospective customers, which alleviated customer concerns about product maturity. Over the next six months through end of 2026, the team will finish developing a fully functional full-scale 34.5 kilovolt three-phase prototype, with customer pilot installations on-site at data centers planned for 2027, and volume revenue shipments targeted to begin in 2028. Management will share detailed opportunity sizing and revenue outlook for the SST business at the company's September 10 Investor Day.
Q: What trends are you seeing in storage pricing and supply chain component costs?
A: Storage pricing per individual product has remained stable overall; the observed quarter-to-quarter variation in average storage pricing is entirely driven by product mix shifts between different CNI and residential storage products. Demand for storage overall continues to grow across markets, driven by higher attach rates and retrofit demand. On the supply chain side, growing data center demand has created moderate tightness for some components (especially memory), leading to minor price increases that are not material to overall results, and the supply chain team has secured sufficient supply to meet customer demand.